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Economic Diplomacy assumes center stage in modern diplomatic practice:...

June 17, 2021: Foreign Minister Shah Mahmood Qureshi says Economic Diplomacy has assumed center stage in modern diplomatic practice.

Chairing a virtual meeting on Economic Diplomacy with participation from Pakistan's Envoys to Serbia, Spain, Sweden, Switzerland, Netherlands, Ukraine and the United Kingdom on Wednesday, he underscored the growing significance of geo-economics in international politics.

Highlighting the valuable role played by Ministry of Foreign Affairs and its Missions abroad in safeguarding Pakistan's economic interests, he stated that the Ministry and the Missions are pivotal in the successful implementation of the Government's initiatives like the Prime Minister's 'Global Initiative on Debt Relief' for developing countries, Economic Outreach Initiative and the Roshan Digital Account Initiative.

He asked Envoys to cultivate and broaden mutually beneficial trade and economic partnerships with Europe, focusing on trade promotion, financial inflows, investments, remittances, tourism and technology transfer.

He further emphasized the need to constructively engage with Parliamentarians in Europe with a view to maximizing avenues of economic outreach and collaboration.

The Minister also instructed the Envoys to work on removing bottlenecks that hinder expansion of economic collaboration with host countries and identifying new sectors for promotion of economic cooperation with Europe.

In order to expand Pakistan's economic outreach to Europe and to maximize trade gains under the GSP Plus Scheme, he emphasized the need for diversification of exports.

While expressing satisfaction with increased inflow of remittances and investment, the Foreign Minister asked Envoys to showcase the investment potential of the country.

Highlighting the government’s robust reform measures for improvement of business climate in Pakistan, he shared that Pakistan's ranking in Ease of Doing Business has significantly improved. Pakistan has secured 6th place among the world's top 10 business climate improvers.

Radio Pakistan

PMRC, HBL Islamic banking close another Sukuk worth Rs1bn

June 17, 2021: Pakistan Mortgage Refinance Company (PMRC) announced the closing of yet another Sukuk, with HBL Islamic Banking. This sukuk will serve to make Shariah Compliant Housing Finance more accessible to the public.

During the ceremony, Mudassir CEO/MD PMRC said, “PMRC is delighted to partner with HBL Islamic Banking for this Sukuk. The funds raised under this Sukuk are important for the promotion of the Islamic housing finance market. I am confident this will be beneficial in the growth of fixed-rate, low-cost housing for the end consumers”.

On the occasion, Muhammad Afaq Head HBL Islamic Banking said that HBL Islamic Banking is pleased to be collaborating with PMRC in the placement of the PKR 1 Billion Sukuk. The funds will be used to promote financing in the housing sector of Pakistan with a special focus on low-cost housing initiatives. This will enable us to play our part in the economic development of the country.

Press Release

Crude oil prices drop, pressured by stronger U.S. dollar

June 17, 2021: Crude oil prices fell on Thursday as the U.S. dollar strengthened after the U.S. Federal Reserve signaled it might raise interest rates faster than expected, but losses were limited by a big drop in U.S. crude oil inventories.

Brent crude oil futures dropped by 41 cents, or 0.6%, to $73.98 a barrel by 0400 GMT after reaching its highest since April 2019 in the previous session.

U.S. crude oil futures fell by 39 cents, or 0.5%, to $71.76 a barrel, after reaching its highest since October 2018 the previous day.

"Energy markets became so fixated over a robust summer travel season and Iran nuclear deal talks that they somewhat got blindsided by the Fed's hawkish surprise," said Edward Moya, senior market analyst at OANDA.

"The Fed was expected to be on hold and punt this meeting, but they sent a clear message they are ready to start talking about tapering and that means the dollar is ripe for a rebound which should be a headwind for all commodities."  

The U.S. dollar boosted its strongest single-day gain in 15 months after the Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.

A firmer greenback makes oil priced in dollars more expensive in other currencies, potentially weighing on demand.

Still, oil price losses were limited as data from the Energy Information Administration showed that U.S. crude oil stockpiles in the world's biggest consumer dropped sharply last week as refineries boosted operations to their highest since January 2020, signaling a continued improvement in demand.

Also boosting prices, refinery throughput in China, the world's second-largest oil consumer, rose 4.4% in May from the same month a year ago to a record high.

"This pullback in oil prices should be temporary as the fundamentals on both the supply and demand side should easily be able to compensate for a rebounding dollar," Moya said.

Reuters

 

Prospect of earlier Fed rate hike sends Asia markets...

June 17, 2021: Asian markets mostly fell Thursday and the dollar held strong gains after the Federal Reserve brought forward its forecasts for hiking interest rates as it looks to prevent overheating in the US economy, which is enjoying a blockbuster recovery.

After a much-anticipated meeting, top bank officials maintained their ultra-easy monetary policy and repeated their belief that the sharp spikes in inflation were expected as businesses reopen and people return to their daily lives.

Officials have for months pledged not to budge from their highly accommodative measures and will stay the course until unemployment is tamed and prices are rising excessively for a long period of time.

However, with the rebound looking well established, they have lately edged closer towards

The closely watched "dot plot" of policymakers' forecasts for interest rates showed 11 of the 18 committee members now expected at least two hikes in 2023.

As recently as March, estimates showed only seven officials seeing a liftoff in 2023. Now there are seven who see next year as a target.

After the meeting, Fed boss Jerome Powell said the projections "do not represent a committee decision or plan" but that the bank was ready to alter policy if it sees signs inflation moved "materially and persistently beyond levels consistent with our goal" of two percent.

Inflation has surpassed that for the past three consecutive months and in May hit a 13-year high.

Powell also said the board had started talking about when to wind in its bond-buying scheme, which along with low rates and vast government stimulus has been crucial to driving a more than year-long rebound in equities from their April 2020 lows.

He said the Fed would give plenty of notice before making any major changes, and will "do what we can to avoid a market reaction".

While many markets have hit record or multi-year highs in recent months, traders have been worried that the era of record low borrowing costs could be nearing an end soon.

Michelle Girard of Natwest Markets told Bloomberg TV: "The move in the dot plot raised concerns that maybe even though the Fed now believes they are not going to be raising rates anytime soon that the timetable might be tightened up, might be moved forward.

"We've gotten to a point that has everyone feeling slightly less comfortable in assuming that the Fed is going to be able to be as patient for as long as they would like."

- Dollar on the rise -

All three main Wall Street indexes ended in the red but off their earlier lows as investors warmed to the idea that the bank will take it slow and steady.

Asian markets were mostly down but also paring initial steep losses as traders see the tightening measures are being debated owing to the positive economic outlook.

Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta were all in the red, though Hong Kong was flat and Shanghai edged up.

The prospect of higher US rates sent the dollar surging against the yen, pound and euro, and maintained its strength in Asia, while rallying across the board against other units.

 It was up more than one percent against the South Korean won, Australian dollar, Mexican peso and South African rand, while the Indonesian rupiah, Thai baht and Canadian dollar were also under pressure.

The greenback's rise also weighed on dollar-priced oil, with both main contracts retreating around one percent from their multi-year highs. Still, observers said they considered the black gold would enjoy further upside owing to an expected pick-up in demand as the world recovers from the pandemic.

Investors were also keeping tabs on metals markets after China on Wednesday said it would release state stockpiles -- including copper, aluminium and zinc -- to manufacturers as it looks to tone down prices, which have surged, with demand rocketing as economies rev back up.

Officials in the world's top metals consumer have grown increasingly worried about surging costs -copper hit a record high last month -- while they have also warned against speculation, which has added to the rally.

In a sign of the impact the issue is having, factory gate inflation surged nine percent in May, its highest rate since 2008.

"We haven't seen the country release state reserves for years," Jia Zheng, at Shanghai Dongwu Jiuying Investment Management, said. "This will boost short-term supply, sending a bearish signal to the market."

AFP/APP

Coca Cola Pakistan announces $50mn investment for 7th Production...

June 17, 2021: A delegation of Coca-Cola Beverages Pakistan Limited (CCI Pakistan), GM Ahmet Kursad Ertin met with the Prime Minister of Pakistan and announced an investment of USD 50 million for a Greenfield project the company plans to set up in the Haripur District, Khyber Pakhtunkhwa (KP).

This will be CCI’s 7th production facility in the country. The construction of this new state-of-the-art plant site is scheduled for completion by the first quarter of 2022. It will mainly cater to the beverage needs of northern Pakistan.

During the meeting, Mr. Ahmet Kursad Ertin presented the company as a leading member of the Pakistan-Turkey Business Council and one of the largest private Turkish investors in Pakistan, which is paving the way for other Turkish investors. According to the delegation, the proposed project will not only bring major investment to the region but also create direct and indirect employment opportunities and revenue generation for the Government as well as for third-party suppliers, vendors & distributors.

A report on the socio-economic impact of CCI’s business was also presented to the Prime Minister. The report reveals that CCI Pakistan’s value chain adds a staggering PKR 865 billion income to the country’s GDP annually – which is about 1.95% percent of the national GDP. Further, CCI’s Corporate Social Responsibility (CSR) projects were also highlighted, which include the Paani Project (Water Filtration Plants) across Pakistan, COVID-19 Relief of USD 1 million, and recently signed MoU of planting 50,000 trees across Pakistan.

The ambassador of Turkey to Pakistan, H.E. Ihsan Mustafa Yurdakul accompanied the CCI Pakistan delegation. Other delegation members included Syed Omar, Director of Public Affairs and Communications, and Mr. Basit Pirzada, Public Affairs Manager. Government officials present at the meeting included Federal Minister Industries and Production, Advisor Commerce and Investment, Federal Secretary Board of Investment, and Chairman Federal Board of Revenue (FBR).

CCI, mainly owned by Anadolu Group - one of Turkey’s leading industrial conglomerates -is a multinational beverage company operating in 10 countries with 26 plants. CCI Pakistan, a subsidiary of CCI, produces, distributes, and sells sparkling and still beverages of The Coca-Cola Company in Pakistan. It currently serves a consumer base of 208 million with 6 production plants and a workforce of 2,500 employees across Pakistan.

Press Release

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